Finland will work for a stronger euro as closer unity in the 17-nation bloc will “by far” be the best outcome for the Nordic nation, Prime Minister Jyrki Katainen said.
The agreement to bail out Spanish banks helps prevent “chaos” in the area, Katainen said at the start of a debate at the Helsinki-based parliament on ratifying the measure.
“Bailouts have prevented the uncontrollable collapse of the European economy,” he said. “They haven’t removed the risk to future developments posed by weaker countries.”
Finland may vote tomorrow on approving the 100 billion-euro ($123 billion) package for Spanish banks. It two days ago reached an agreement with Spain to get collateral for its guarantees, meeting the Nordic country’s condition for participating in the rescue. The country is one of four AAA rated nations left in the euro area and was also the only euro member to require extra security for providing aid to Greece.
“It’s easy to be pessimistic on Europe and the euro,” Katainen said. “But I don’t understand those who want the euro area to break apart or for Finland to leave.”
Finland got 769.9 million euros in collateral to cover 40 percent of the amount it will guarantee. Finland will be paid in cash by Spain’s deposit guarantee fund, because negative pledge clauses on bonds mean the state can’t directly be a party to the agreement. The collateral will be invested in the debt of the five highest-rated euro countries, according to a statement.
The parliament will probably approve the package, which includes the collateral deal as well as guarantees to the European Financial Stability Facility for the bailout, Finance Minister Jutta Urpilainen said yesterday.
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